Daewoo International Corporation

(PT Bio Inti Agrindo, PT Papua Agro Lestari, PT Ulilin Agro Lestari)

Subsidiary of South Korean Posco group has bought its way into MIFEE. The company whose plantation plans once brought down the government in Madagascar is already clearing land for an oil palm plantation.

Last updated: 03/08/2013

Company Description: Once South Korea’s second biggest corporate conglomerate, Daewoo went spectacularly bankrupt in 1999. Some parts of the company were sold off but several parts of the company survived and expanded. Aside from its steel and chemicals businesses, and a growing interest in mining, Daewoo International’s Agro-Resources division has been looking to grab land across Asia and Africa, for agrofuels and for South Korea’s food security. Most notoriously Daewoo was attempting to develop 1.3 million hectares of land in Madagascar, an investment which after much community resistance eventually brought down the government there in 2009.1

Plans in Merauke: Daewoo International Corp bought an 85% stake in PT Bio Inti Agrindo.3 This company, previously thought to have been linked to Korindo, has obtained permissions to develop a 40,000 hectare oil palm plantation in Merauke.

It seems likely that Daewoo’s plans are not limited just to this 40,000 hectares. Local groups believe thar PT Papua Agro Lestari and PT Ulilin Agro Lestari are connected to Bio Inti Agrindo. Both these companies have permits for 40,000 hectare oil palm plantations, although PT Ulilin Agro Lestari does not seem to be currently active.

Furthermore, the nature of the relationship between Daewoo and Korindo remains unclear. In particular local sources have noted that PT Berkat Citra Abadi, previously known to be a Korindo company, appears to be run from the same office as PT Bio Inti Agrindo and PT Papua Agro Lestari.

Previously two more companies, PT Muting Jaya Lestari and PT Digul Agro Lestari, registered at Bio Inti Agrindo’s address in the Stock Exchange Tower in Jakarta, were given initial permits for large corn plantations. Those permits appear to have been cancelled.

Stories from the ground: In 2011 both PT Bio Inti Agrindo and PT Papua Agro Lestari are reported to have paid local people 50,000 per hectare for their 39,800 hectare concession in Ulilin district.4

In Kampung Selil, a blockade of PT Bio Inti Agrindo’s land took place in December 2012. There is reportedly a conflict in this village because two different clans from different ethnic groups claim rights over the same land.

Also in 2012, a delegation of villagers affected by oil palm in Merauke travelled to Jayapura to raise their concerns there. Amongst the issues that caused resentment was the fact that PT Bio Inti Agrindo has obtained Cultivation Rights Title (HGU) to the land. This means that after the company’s 35 year lease is over, the land reverts to the state, and not the customary owners. Villagers claimed not to have had any knowledge of this when they signed over the land.5

In April 2013 another land sale took place to PT Bio Inti Agrindo. This was in the Muting area. After 12 hours of negotiation, with police and military present, the company managed to persuade the people to lower their demand of 70 billion Rupiah (US$ 7 million). They agreed on 1 billion Rupiah up front for the land, and then payment for the timber would take place as trees were cut. It was not stated how many hectares this amount was for.6

International links: As well as Indonesia, Daewoo International Corp is planning a 26,000 hectare rice and soy-bean farm in Cambodia.7 It also has offices around the world. However, since Daewoo Corporation was broken up after the Asian financial crisis, not all companies bearing the name Daewoo are the same. In particular, the car brand has been bought by General Motors, who have been phasing out the Daewoo brand.

PT Bio Inti Agrindo has announced on their website that they are also conducting business in Madagascar, so it may be that this Indonesian company will be Daewoo’s vehicle to revive it’s projects in that country which have met with heavy resistance. Reports from Korean Media and Madagascan groups also indicate that Daewoo might be intending to move back in there.8 The website also mentions that the company uses the Dutch Rabobank for financial services.